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Lochmiller investors have waited long enough, prosecutors argue

By {screen_name}
Monday, February 14, 2011

Some investors already have had to wait too long for the trial of Valley Investments owner Philip Rand Lochmiller, prosecutors said in court papers.

Lochmiller is seeking a delay in his trial, which is scheduled to begin this month, saying his legal team was unable until Feb. 2 to open files on computers that were seized by investigators and then turned over to prosecutors.

“Because a great number of victims in this case are elderly and have health concerns,” prosecutors Pegeen Rhyne and Tim Neff wrote in a response to Lochmiller’s request. “Indeed, some elderly victims have passed away already during the pendency of this case.”

U.S. District Judge Philip A. Brimmer is to decide on the postponement after a hearing today.

The prosecutors said they couldn’t agree to a delay, but they offered to delay use of the books by an accounting expert until the second week of trial, giving the defense seven additional days to prepare for that part of the evidence.

In any case, the prosecutors wrote, Lochmiller’s defense was partly responsible for the delay in gaining access to the company’s books.

Lochmiller’s attorney, Daniel Smith of Denver, said in court papers he had been frustrated since June in trying to see accounting books that were kept on seized Valley Investments computers.

Attorneys and computer experts for the defense were unable to open the files, even by using passwords supplied by prosecutors, Smith said in his motion.

It wasn’t until Feb. 2 that defense experts, aided by government officials, were able to open the file, Smith said. Defense experts need at least 60 days to review the information, Smith wrote.

Prosecution experts, however, said the defense could have resolved the difficulty in November.

“This two-month delay is more than the 60 days that the defense now claims is necessary” to review the files, the prosecutors wrote.

Lochmiller faces 33 counts of conspiracy, fraud and money-laundering charges in the trial. His son and executive assistant have pleaded guilty in agreements with prosecutors.

The assistant, Shawnee Carver, is to testify against him.

More than 400 investors have lost $31 million in Valley Investments’ collapse., invesigators allege.

Investigators have said Valley Investments appeared to have been operated as a Ponzi scheme, and that Lochmiller concealed from investors his conviction on securities-fraud charges in California.